Government ministers have called a meeting with mortgage lenders to discuss the record low mortgage approval figures.
Mortgage approvals fell by 10% in 2010, according to figures revealed by the British Banker’s Association (BBA).
Members of the BBA approved just 400,000 mortgages in total with lending in December reaching a figure of just £880 million, marking the second lowest level of approvals in an 11 year period.
The Association said: “Mortgage demand was weak throughout the year. Unsecured credit demand was also weak during last year, with net lending reducing by £2bn as households adopted a lower appetite for credit due to the uncertain environment for employment and the economy”.
The figures highlight the poor state of the property market and the difficulties that first-time buyers are facing when trying to get on the property ladder – banks are still enforcing tight lending criteria.
As a result of the statistics, Housing Minister Grant Sharp has announced that he will call a meeting with industry figures to assess the issue and find a solution.
He said: “We want to do more to help aspiring first-time buyers – the average age of the first-time buyer with no support from their family is now 37, and there are 1.4 million households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability”.
He continued: “So I’m calling together key figures from across industry to discuss how we can tackle this problem”.
Mr Shapps will inform the banks to develop new products specifically created for first-time buyers, such as schemes for parents who want to help their children become home owners.
He is also keen to get the number of equity loans and shared ownership schemes increased.